Netflix, Inc. (NFLX) To Enter China By Partnering With Wanda Group

Netflix partners up with the Wanda group in order to enter the Chinese market.

The multinational VOD platform is partnering with Wanda Group, a Chinese conglomerate owns Wanda cinemas, AMC entertainment and other cinema chains globally, in order to enter china’s market, Alibaba has to be careful with it competitor now who is now entering its hometown.

Netflix, Inc. plans to enter the Chinese market so that it can expand it online video streaming services in China. But this is not new as the stated that the discussions between the two companies have been going on since September. This can prove to be beneficial for Wanda Group as well because it does not own any source of Video streaming, through the partnership with the VOD chain, this particular service can be attained leading to the completion of the media service.

Alibaba Group Holdings Ltd. made attempts to set a deal with the video streaming service provider before this partnership took place but it couldn’t unfortunately for Alibaba be done because it already had an online streaming video service of its own called Tmall Box Office, since both these companies were rivals the deal couldn’t be sealed. Netflix’s competitors in China Market are Alibaba, Baidu Inc. and Tencent. So there is already tough competition to begin with, the streaming company has faced problems in its operations in china but that has not stopped it evidently, it still hasn’t received the license of a foreign media firm even though the company needs 8 local licenses of different sorts to run its streaming services in the country. Netflix TV shows are mostly explicit so there has to censorship based on Chinas regulatory. The streaming company has to partner and negotiate with local partners; Netflix is negotiating with Alibaba, Wasu digital media group and many other Chinese online broadcasters according to WSJ.

In 2015 60 percent of Wanda cinema earning was generated from online transactions and the number was 40 percent in the year 2014, there are expectations for it to increase to 80 percent in the year 2016, all the company needs is an online streaming platform which it will be able to achieve through Netflix.

Alibaba and other streaming services already in the country will give Netflix a very tough competition, since Netflix is going to be fresh to the Chinese market it has to be very careful with what shall be done and what should not because the competitors would never help this multinational company out. Aliabas Tmall box office serves as an entertainment provider to its customers with demands of 600 million just local households. Netflix has to speed up to achieve success in China. Netflix stock closed at $101.69 on the 19th of October.

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